Housing demands stretch supply

Montana State Roundup

During the summer people lived in campgrounds for lack of affordable
housing in Bozeman, and some University of Montana students camped out
in lounges and dorm basements until housing could be found for them in
Missoula last fall.

Housing stock is in short supply across Montana: Available rental housing
stands at less than 1 percent in Bozeman and in Billings, and in Missoula
the overall vacancy rate is less than 2 percent.

The current real estate boom is a complete turnaround for some communities
that experienced a glut of housing in the 1980s. There was a housing surplus
in Missoula as recent as 1989, according to Nancy Leifer, coordinator
of the Missoula Housing Task Force. In Billings, "the '80s were pretty
devastating" says Lucy Brown, executive director of the Housing Authority
of Billings. "The market has miraculously reversed itself in four years,"
Brown says.

Still there is uncertainty about the future. Brown says Billings' lenders
are a little reticent to invest in rental housing projects because they
were stung in the '80s, and the future rental market is hard to assess.

The rental housing shortage is fed by an overall scarcity of affordable
single-family homes. In Bozeman the average price of a single- family
home is $118,000, but the median income in the city is $27,000. "That
makes coming up with a down payment near impossible," says James Goehrung,
neighborhood coordinator and grants person for Bozeman. In addition, land
costs are high in Bozeman: An average residential lot runs from $35,000
to $50,000.

"People are looking for everything in Billings," Brown says. Property
values have increased dramatically, and as a result, some single-family
home owners who previously rented their properties are selling them. Brown
says this cuts out a source of rental housing for large families.

The single-family home picture is worse than the short supply of rental
housing in Missoula, Leifer says. "My sense of what's happening in Missoula
is that it's becoming the Boulder, Colo., of the '90s," Leifer says. In
the price range of $83,000 and below, fewer than 20 units appeared in
the multiple listing in August. According to Leifer, based on population
and income figures, the city needs 400 homes in that price range to meet
the housing demand.

All three cities have task forces to cope with their new-found popularity.
The Bozeman areawide housing task force is attempting to project future
housing needs for the city's growing and changing population. In the meantime,
two low- and moderate-income projects are planned: 50 units of owner-occupied
and rental housing, and a coalition of local churches plans to build a
nine-unit apartment complex.

In Billings two private multi-family housing projects, which will create
180 additional units, are on the drawing board. The Housing Authority
is also looking at developing a smaller complex.

The Missoula task force was formed two years ago after University of
Montana students began the school year living in tents on the university
mall. Since then the task force has spurred the development of 450 new
units of rental housing. About 220 units are university housing to accommodate
the growing student population, which has increased by at least 1,000
since 1989, according to Leifer. And a non-profit community group is building
a mobile home court run as a cooperativethe first of its kind in
Montana.

At a recent statewide housing conference, Leifer says, reports of housing
shortages came not just from the cities, but from small towns as well.
"We've been discovered here," Goehrung says.